Canadian Grocer February

Page 1

In-store tech trends Selling health & wellness FEBRUARY 2021

Exclusive Research

THE SHOPPERS HAVE  THere’s HEIR SAY what they think about the grocery shopping experience

Contents Opinions 5 || Front Desk 16 || Shopper Sense People 6 || The Buzz

Comings and goings, store openings, awards, events, etc.

8 || James Boettcher

Righteous Gelato’s ceo wants to enrich lives, one scoop at a time

Ideas 11 || Locking in loyalty

Paid memberships are the latest tool retailers are using to keep customers coming back

February 2021 || Volume 135 - Number 1

Cover Story


21 Our exclusive research reveals what Canadians think about the grocery shopping experience Features

13 || Grocer on wheels

HEALTH AND WELLNESS 29 In-store and online, here’s how grocers can woo the health-focused consumer

Introducing Grocery Neighbour, a tractor-trailer turned grocery store

15 || Global grocery

News and ideas from the world of food retail

Aisles 37 || Rising to the occasion

With innovative new options, bread sales aren’t loafing around

TECH IN THE TIME OF COVID 32 Innovative in-store tech continues to be adopted, often seeking to solve pandemic-related challenges

40 || Connection through cards

Interest in greeting cards is rising, and grocery stores are emerging as a prime buying spot

42 || Oils: Four things to know

Learn all about this longstanding, versatile ingredient


44 || Booze-free bevvies

Non-alcoholic beer, wine and spirits are more popular—and better tasting—than ever before



45 || New on shelf

Shining a spotlight on the latest products hitting shelves

Express Lane 46 || Design for the times

Retail strategy and design expert Kevin Kelley talks about the changing grocery store

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February 2021 ||  CANADIAN GROCER 3

Front desk PUBLISHER

Vanessa Peters


Shellee Fitzgerald


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Valerie White


Katherine Frederick

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MAIL PREFERENCES: From time to time other organizations may ask Canadian Grocer if they may send information about a product or service to some Canadian Grocer subscribers, by mail or email. If you do not wish to receive these messages, contact us in any of the ways listed above. Contents Copyright © 2021 by EnsembleIQ, may not be reprinted without permission. Canadian Grocer receives unsolicited materials (including letters to the editor, press releases, promotional items and images) from time to time. Canadian Grocer, its affiliates and assignees may use, reproduce, publish, republish, distribute, store and archive such submissions in whole or in part in any form or medium whatsoever, without compensation of any sort. ISSN# 0008-3704 PM 42940023 Canadian Grocer is Published by Stagnito Partners Canada Inc., 20 Eglinton Avenue West, Ste. 1800, Toronto, Ontario, M4R 1K8.

GETTING A HANDLE ON SHOPPERS In these strange times, what do shoppers really think about the grocery shopping experience?

AT THE TIME of this writing, Canada just marked a grim milestone; a full year has passed since the first case of COVID-19 was recorded in this country. A year is a long time. If the prevailing (sometimes disputed) wisdom holds that new habits can be formed in a matter of days (anywhere from 28 to 254 days!) we’re certainly well beyond that. Indeed, nearly a year of rolling lockdowns and social distancing has dramatically impacted how we work, socialize, eat and, of course, how we shop for groceries. For this issue, we wanted to get a better picture of how Canadians, deep into the pandemic, are shopping for groceries and just how they feel about the experience. We worked with the research team at EnsembleIQ (Canadian Grocer’s parent) to bring you the 2021 GroceryIQ Study: Taking Stock of Grocery Shopper Attitudes and Behaviours report. One thousand shoppers across the country were surveyed and asked about everything from how they decide where to shop to their biggest pet peeves, what they think about in-store sanitation efforts and how satisfied they really are with the online shopping experience. Read all the report’s highlights starting on page 21. Staying on the subject of shoppers, in his column this issue NielsenIQ’s Hanif Mohamed, senior vice-president of retail

Long waits at the check­out remain a pet peeve, according to our new shopper research

services, explores grocery retail beyond the vaccine. He offers insights on what it will take to keep the post-pandemic shopper spending in your store once things open up and more options become available to them (page 16). And writer Rebecca Harris looks at today’s health-focused consumers and what they want from the grocery store (page 29). It’s not just trendy products they’re seeking; these consumers are hungry for the whole health package: information, education and customized solutions for both their physical and mental well-being. In fact, they want grocers to be their ally in health. Happy reading!

Shellee Fitzgerald Editor-in-Chief

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The Buzz

The latest news in the grocery biz ON THE MOVE

OPENINGS EMPIRE COMPANY has announced seven more Safeway locations that will reopen under the company’s FreshCo discount banner in the second quarter of fiscal 2022: Brentwood in Calgary, Milbourne Mall in Edmonton, Saddle Ridge in Calgary, Coliseum in Edmonton, Palisades Square in Edmonton, Gateway Village Mall in St. Albert, Alta., and a location in Thunder Bay, Ont. With this announcement, Empire has confirmed 37 of approximately 65 FreshCo locations planned for Western Canada. FARM BOY is expanding its presence in downtown Toronto with the opening of its third store in the city’s core—and the 36th in its network—in late January. Earlier in the month Farm Boy opened its first location in Waterloo, Ont. and has announced plans to open six more stores by the end of 2021.

AWARDS & RECOGNITION LONGO’S leads the pack in customer experience, according to Leger’s 10th annual WOW Index. The independent grocer ranked No. 1 in the grocery sector in Ontario, followed by Whole Foods, Farm Boy, Fortinos and Zehrs. The index evaluates stores on 16 dimensions related to customer experience—including product quality and variety, store ambiance and layout, price and promotional activities, staff competency and efficiency at checkout.

Star Women in Grocery Awards call for nominations! We want to hear about the most outstanding women working in the Canadian grocery industry. If you know an impressive woman, please take a few minutes to nominate her at The deadline to nominate is april 9 and winners will be featured in our June/July issue. 6  CANADIAN GROCER || February 2021

Catherine Sumague has been named vice-president of sales at NaturSource. Previously, Sumague was sales director at the Quebec-based food company. UNFI Canada has added to its team with the appointment of Sarah Joseph. Joseph is the company’s new director of marketing, branding and communications.

Tim McNerney

Caroline Nadeau

Scott Lindsay

Catherine Sumague


The Canadian Health Food Association is presenting its  Healthier by Nature Expo  on March 20. For details, please visit The Retail Council of Canada’s Retail  Human Resources Forum  takes place on March 25. Visit for details. From April 12 to 16, the Canadian Produce Marketing Association is holding  CPMA Fresh Week . For more information visit convention.

Sarah Joseph

News to share? Tell us about your openings, comings and goings, etc. by dropping a line to sfitzgerald@


Empire announced seven more FreshCo conversion locations; six in Alberta and one in Ontario

Coca-Cola Canada has announced leadership changes. Tim McNerney has been promoted to head of Canadian retail sales for the company; previously he served as vice-president of sales. And former vice-president of sales Caroline Nadeau is now leading the company’s commercial strategy efforts across Canada and the North East United States. The changes follow the company’s December announcement that Scott Lindsay, the company’s long-time senior vice-president of sales, plans to retire at the end of February. Lindsay joined Coca-Cola in 1992 and has served on the company’s leadership team for the past 17 years.


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People THE GELATO AFICIONADO James Boettcher wants to enrich peoples’ lives, one delicious scoop at a time

By Carolyn Cooper Photography by Andrew Lipsett

Who you need to know

30 seconds with …


ames Boettcher admits that he didn’t even know what gelato was when he first began working with the small Calgary scoop shop then known as Fiasco Gelato. “That was in 2005,” he laughs, “and by 2009 I had fallen in love with the spirit and energy around this place.” That’s when Boettcher decided to buy the company. The young entrepreneur had grown up around his grandmother’s catering business, and had worked at Sunterra Market, both of which he says fuelled his passion for wholesome, natural foods. While still in high school he launched his first company doing freelance design for local businesses, including Fiasco Gelato. Fast forward 12 years and Boettcher’s Righteous Gelato (which changed its name from Fiasco last April) is now one of Canada’s leading gelato producers, capturing frozen dessert fans with its artisanal, premium-quality products, while at the same time building a better business model. The company’s lineup, which includes dairyfree and plant-based, small-batch gelato, is sold in more than 3,000 retail locations across the country, and in 2020 the brand entered the U.S. Pacific Northwest market through Whole Foods Market. Boettcher says while most Canadians today are more familiar with the centuries-old treat than they used to be, some consumers still ask what gelato is. “We tell them it’s what ice cream was meant to be,” he grins, explaining the frozen treat is “a mix of milk and cream with less fat, sugar and air” than ice cream, making it rich, smooth and flavourful. Although the company has created hundreds of decadent recipes over the years, Righteous currently offers retailers 23 flavours of gelato and sorbetto, including seasonal creations such as Sticky Toffee Pudding and Dairy Free Chocolate Peppermint. Most varieties are certified gluten-free, and all are free of artificial flavours and colours. The vibrant desserts are sold in clear PET 562-mL tubs that are recyclable and reusable, as well as 106mL single-serve packs for locations like hospitals and sports arenas. Top-selling SKUs are Dairy Free Raspberry Lime sorbetto, followed by Dark Chocolate Caramel Sea Salt. “But the one with the most swagger right now is Dairy Free Peanut Butter and Jam,” says

Boettcher. That flavour is one of four new nut gelatos, which also include Dairy Free Roasted Pistachio, Dairy Free Toasted Coconut, and Dairy Free Salted Hazelnut. “We’re always either tuning up the current line or thinking of what’s next,” he says, adding that oat milk-based products will launch this spring. Customer feedback is crucial in determining what varieties stay or go, and has even been a source of flavour inspiration. “We get such cool fan mail,” says Boettcher. “The consumers in this space have a feeling of ‘I want a premium, carefully crafted product,’ and of having earned this delightful treat, which may not be an everyday thing. The trust they have in our dairy-free and our plantbased products, as well as our sourcing practices, means the consumer knows they’re getting what they’re paying for.” The entrepreneur also attributes a big part of his company’s success to its people-first business approach, which he says “has always been this mentality of do what’s right and the money will come.” Becoming a Certified B Corporation has been an important element of that, and has allowed Righteous to benchmark its own practices, while supporting other Canadian companies in making more sustainable, conscious business decisions. “For us it’s been this amazing beacon that has allowed us to continue to answer a very simple question with each and every decision we make, which is, ‘can we live up to our name?’ So everything, from innovation to our employment practices, always starts with what’s in your heart and what feels right.” It’s been a winning formula for Righteous, which was selected as one of Alberta’s Top Employers for 2020. Boettcher’s leadership also won him the 2020 CANIE Entrepreneur of the Year Award for the Prairie Region, celebrating excellence in innovation and entrepreneurship. “I think the easiest way to frame success, especially in terms of business, is that we always want to leave the world better than we found it,” he says. “Anybody can make gelato, but we’ve always seen it as so much more than that. It’s been this amazing journey of connecting people through nourishment and happiness. I mean, nobody’s mad when they get a scoop of gelato—at least not ours.” CG

JAMES BOETTCHER What’s your favourite product?

My favourite is the very first flavour I created when I took over the company, Raspberry Lime sorbetto. It’s so delicious and never gets old.

What are the rewards to working in the food industry?

What I love is that as an industry—and you saw it during COVID—everyone rallies around the ability not only to keep the shelves stocked, but also to go above and beyond to donate to people and feed people.

What trends do you see influencing the frozen dessert sector?

I think there will be a push away from dairy, and I don’t necessarily agree with it, but there are a lot of dairy intolerance and allergen challenges for folks, so that’s where we’ll see some changes in the market. The cool thing for consumers is that literally everything is available. And now it just sort of loops back to is it good or not? That’s going to be where the push is—quality over quantity.

What do you like to do when you’re not working? Travel has been such a big part of my life. Pre-COVID, it wouldn’t be strange to get on a plane for a four-day weekend somewhere to see different cultures and taste different foods. Probably my No. 1 hobby is learning new things.

February 2021 ||  CANADIAN GROCER 9

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Amazon’s paid membership success is propelling grocers to adopt similar programs



LOCKING IN LOYALTY Paid memberships are another tool retailers are using to keep customers coming back By Danny Kucharsky

For an increasing number of grocers and other retailers, paid memberships are where it’s at when it comes to loyalty programs. Propelled by Costco’s and Amazon’s success in the field, paid membership programs are on the rise, as retailers aim to lock in customer loyalty. Bond Brand Loyalty’s 2020 Loyalty Report found 32% of Canadians are willing to pay a fee for a paid loyalty program, up from 26% in 2018. Retailers’ objectives haven’t changed, says Scott Robinson, vice-president, loyalty consulting at Bond Brand Loyalty. “They’re still looking to capture greater share of wallet, retain customers (and) understand more about their customers.” Paid programs help them accomplish these goals, he says. More consumers are willing to invest in paid loyalty programs if they see value in them, says Sylvain Charlebois, senior director of Dalhousie University’s Agri-Food Analytics Lab in Halifax. “I suspect grocers are starting

February 2021 ||  CANADIAN GROCER 11

to notice. If you want to keep your customers away from your competitors, that’s one way to do it.” Grocers are also seeking new forms of revenue, he says. “Grocers have realized in order to make money you can’t just operate in a high-volume, low-margin environment forever. You need to generate different revenue streams.” Bond Brand Loyalty’s Robinson says these programs have “a good think-of-me-first mechanic” that compels consumers to gravitate first to the retailer with whom they have a paid membership, thus creating a loyalty loop. “You’re married to the company a little bit more because you’ve paid a fee. You’ve got skin in the game,” agrees retail analyst Bruce Winder. “It’s actually a brilliant model because it forces loyalty and it offers a new revenue stream.” According to a 2020 McKinsey & Company survey on loyalty programs, members of paid loyalty programs are 60% more likely to spend more on the brand after subscribing, while free loyalty programs only increase that likelihood by 30%. In addition, paid loyalty programs drive higher purchase frequency, basket size and brand affinity compared with free loyalty programs. In 2018, Loblaw became the first of Canada’s Big Three grocers to launch a paid membership program. The PC Optimum Insiders program currently has more than 100,000 active members “and is showing really strong quarterly growth that is reflecting a really healthy demand for these enhanced services,” says Sean Keith, director of sales for Eagle Eye Solutions in Canada. The company’s digital marketing platform, Eagle Eye AIR, powers Loblaw’s PC free and paid loyalty programs. For $119 a year, PC Optimum Insiders offers such benefits as free grocery pickup, 10% back in PC Optimum points on all PC and Joe Fresh branded products, a welcome box of PC products, sneak peeks of new products and more. After the program launched, “we noticed that members were receiving benefits that represent roughly more than twice the value of the subscription costs pretty much out of the gate,” Keith says. Amar Singh, principal analyst at consulting firm Kantar, says grocers such as Loblaw are launching paid membership programs to preserve market share from Amazon, which continues to expand its Canadian grocery footprint. Canada “is a standout for loyalty programs,” says Singh, noting that more than half of Canadians belong to the free PC Optimum program, while 40% of Canadian households are Costco members. This certainly augurs well for paid loyalty programs that are able to provide bang for the buck, Singh says. “Canadians are happy to spend money if 12  CANADIAN GROCER || February 2021

“You’re married to the company a little bit more because you’ve paid a fee. You’ve got skin in the game. It’s actually a brilliant model because it forces loyalty and it offers a new revenue stream”

they see the value. If you have the right merchandising mix and you can provide inspiration and convenience, they will reward you.” Late last year, Iowa-based grocer Hy-Vee, which has more than 240 stores in eight Midwestern U.S. states, launched its own paid loyalty program called Hy-Vee Plus. “We are always looking for ways to wow and excite our customers and Hy-Vee Plus premium membership is a prime example,” explains Dawn Buzynski, Hy-Vee’s director, strategic communications. Its purpose “is to drive brand loyalty by providing exceptional service and value to our customers.” Sign-ups for the program are trending ahead of the retailer’s projections. Buzynski says the free standard delivery and free two-hour express pickup that are included in the US$99 annual membership program can, over the course of a year, save members who shop weekly about US$418 on delivery fees. As competition in the paid membership field continues to increase, grocers will have to keep improving the value of their programs, according to Winder. “These players are going to be fiercely fighting for memberships,” he says. Hy-Vee Plus, for example, gives members exclusive monthly offers. In January, registered dietitians provided a free consultation service that included a month of menu ideas. Another distinct feature is the Red Line concierge service, a dedicated phone line for members at their preferred stores. On its website, Hy-Vee touts the service with the following: “whatever you need, day or night, our Red Line team is ready to take your call or text.” Getting these programs right requires making sure the value proposition is transparent and easy for customers to understand, says Eagle Eye’s Keith. “The idea is that you’re giving people more than just a point discount. You’re giving them time; you’re giving them value.” Retention will come down to the ability of retailers to collect member data so they can offer “hyper-personalized experiences,” Keith says. “That’s going to be the differentiator.” K a n t a r ’s S i n g h p r e d i c t s paid loyalty programs will increasingly become marketing platforms on which brands “advertise to reach consumers differently and have enhanced interactions with them.” As grocers increasingly look at ways to get people to shop again and again in their stores and online, “the loyalty war is just beginning,” Dalhousie’s Charlebois says. “During an era where omnichannels are becoming more predominant, you want to make sure you can rely on your customers’ loyalty as much as possible.”



Grocer on  WHEELS


Grocery Neighbour is a tractor-trailer turned grocery store with an automated checkout system  By David Brown



In the next few months, a tractor-trailer truck converted to a grocery store on wheels will start to visit neighbourhoods across Canada. And Grocery Neighbour president Frank Sinopoli believes that truck will be just the first of a new fleet of mobile grocery stores that could serve thousands of communities across North America. “It was a direct result of the pandemic,” says Sinopoli of the idea for Grocery Neighbour. He believed massive change was coming to grocery shopping because of the COVID crisis, and started working on the idea of a mobile grocery store in late March. “But if I’m being dead honest, I had no idea if it was even possible,” he says. Now, nearly a year later, the first truck is being completed. Sinopoli is also fielding a steady stream of calls from interested franchisees (“In the last 24 hours alone, I’ve had seven franchise requests,” he says) and people are visiting the company’s website to vote to bring one of the new trucks to their neighbourhood. The idea is straightforward: a tractor-trailer converted to a grocery aisle. With an automated checkout system, shoppers simply enter through one end, pick up what they want, scan it with their phone and leave through the other end. The selection obviously won’t compare to a traditional grocery store, but the prices will be competitive, says Sinopoli. What will make it a success is the ability to take grocery retail into the many neighbourhoods and communities underserved by existing grocery retailers. “There’s thousands of neighbourhoods across North America that fit that profile,” he says.

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Grocery retailer Albert Heijn has teamed up with Selecta Nederland, a leader in self-service concepts, to launch unstaffed Albert Heijn To Go micromarkets at 100 office locations in the Netherlands. The partners reason that workplaces are changing and that employees are—and will continue to be, even after the pandemic—at offices less often and at different times, and that providing 24/7 access to food and drinks is a smart strategy. The customizable micromarkets will offer salads, sandwiches, snacks and drinks that customers pay for via a self-checkout system. Beyond offices, the partners are also looking to expand the concept to hospitals and educational institutions.



News and ideas from the world of food retail


In response to the growing popularity of plant-based eating, U.K. retailer Asda is testing a vegan butcher counter concept at its location in Watford. Called Veelicious, the butcher—created in partnership with vegan concept creator Kbox Global—will serve up plant-based offerings such as flacon, bean burgers, meat-free meatballs and ready-to-eat meal kits. Asda says it has seen a 175% increase year-over-year in online searches for “vegan” on its website and is forecasting sales of vegan products to jump by triple digits during Veganuary, an annual movement that challenges people around the world to go vegan during the first month of the year.


Promoting supplier diversity

As part of its commitment to improve its diversity and inclusion efforts, U.S. grocer Trader Joe’s pledged, last summer, to expand the number of items in its stores sourced from Black-owned businesses. The California-based retailer recently announced it had surpassed its initial goal, and that more than 25% of products evaluated by its Tasting Panels had been from Black-owned suppliers and it had approved more than 30 new products, some of which are already appearing on store shelves.



Morrisons is aiming to appeal to budgetconscious U.K. households with its new family recipe box. The “value” box is packed with enough food (22 different products, in fact) to feed a family of four for five meals, all for £30 (about $50) including delivery. The box includes recipes that are quick and easy to prepare. Unlike the portioned-out ingredients in meal kits, the Five Meals to Feed a Family of Four box contains full, retail-sized packs of ingredients so customers will have food left over to make additional meals. Morrisons is known for its range of food boxes, which includes a Vegetarian Food Box, Gluten-Free Food Box, and a British Farmers Food Box.

Albertsons is testing an automated, contactless, temperature-controlled grocery pickup kiosk at a Jewel-Osco store in Chicago. According to the company, customers who select “kiosk pickup” are given a two-hour window to collect their groceries at the unit. Customers scan a code on their phone and their order is “robotically delivered” to the front of the unit for pickup. Created by tech firm Cleveron, the unit features two temperature zones—regular and deep freeze. Albertsons says it plans to install a second unit at a Safeway location in the San Francisco area. CG

February 2021 ||  CANADIAN GROCER 15

SHOPPER SENSE ||  Hanif Mohamed

Retail beyond the vaccine

What it will take for grocery retailers to win the new (postpandemic) consumer?

COVID-19 accelerated e-commerce adoption in Canada, and we should expect some of these online shopping and purchasing behaviours will become ingrained among consumers who have learned the ease-of-use and convenience of online shopping

The conversation surrounding the COVID 19 vaccine has been dominated by logistics: drug administration approvals, the speed of production rates, countries vying to secure enough doses to vaccinate their populations and, most recently, concerns around scaling up and speeding up the rollout around the world. While the vaccine is being touted as the treatment, it comes down to personal choice. Across Canada, as the government is now faced with the monumental task of rolling out COVID-19 vaccines, consumers are still deciding whether the vaccine is right for them. In fact, only 47% of Canadians plan to get a COVID-19 vaccine as soon as it becomes available, while 33% plan to wait for some time and 10% do not plan to be vaccinated (9% are undecided). So, what does this mean for retailers and manufacturers in Canada? First, let’s look back to 2020 where we saw record-­ breaking sales across fast-moving consumer goods (FMCG) as consumers faced various stages of lockdown. Dollar sales surged to $117,400,632,512 (in the 52 week period ended Jan. 2, 2021), an increase of 11% from 2019, representing nearly $12 billion in added spending. With this substantial increase in sales, both national brand and private-label products benefited. National brands saw an 11% increase (representing $9.3 billion) in sales while private-label products recorded a 13% (nearly $2.4 billion) increase in sales and increased their dollar share by 0.3%. While private label saw a larger percentage growth, national brands still dominate and account for more than 82% of all FMCG sales. In 2021, depending on where you are located, you are likely still facing various stages of lockdown. This

16  CANADIAN GROCER || February 2021

is good news for the FMCG industry as sales are likely to continue trending higher than an average year, as consumers spend the majority of their time at home. However, retailers and manufacturers may be hard-pressed to see similar gains this year. As more and more Canadians receive the vaccine, and (hopefully) return to a more balanced lifestyle, consumer spending will start to shift back out of the home and into industries that have been negatively impacted during the pandemic. In fact, once they receive the vaccine, 38% of Canadians feel confident they can start to dine out again, 41% are confident returning to the office, and 30% say they will feel confident enough to return to a movie theatre. All of these activities will see spending shift from FMCG outlets to other industries. In addition, 17% of Canadians report they plan to spend more on out-of-home dining and 9% plan to spend more on delivery and/or take-out meals. So, what can retailers do to ensure consumers continue to spend their dollars in grocery stores in 2021? A strategic focus on omnichannel capabilities is essential to keep consumers engaged in the long term. COVID-19 accelerated e-commerce adoption in Canada, and we should expect some of these online shopping and purchasing behaviours will become ingrained among consumers who have learned the ease-of-use and convenience of online shopping. Other consumers, meanwhile, will relish the ability to leisurely stroll through grocery stores, discovering new products and interacting with staff. It is also important to note that online channels serve a broader purpose than simply shopping. They are an essential way to research, compare prices and hunt for the right deals before deciding whether to leave home to make the purchase at a physical store or buy products online. Savvy retailers who see these types of activities and remove or minimize previous adoption hurdles will help ensure that any and all consumers stay online and make a purchase once they find it. It is important for retailers to remember that what separates multichannel from omnichannel is the unified experiences across all of your platforms. Providing seamless customer experience, whether the client is shopping online from a mobile device, a laptop or in a brick-and-mortar store, is fundamental in the still-evolving omnichannel shopping experiences. CG

Hanif Mohamed is senior vice-president of retail services at NielsenIQ in Toronto.

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In 2012 Giovanni Rana launched in the USA. Since then, Rana grew the category by 39% in that last 9 years and is now the market leader with 46% share. Our investments in premium quality, innovation, distinctive packaging, advertising & promotion have driven the category growth and we can do the same in Canada. Giovanni Rana is proud to share his brand with Canada, and to have been recognized with the Canadian Grand Prix Award! Buon Appetito!


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Taste an Italian summer straight from the can

Clausthaler Original – The Pioneer from Germany & Clausthaler Dry Hopped – the world’s first dry hopped non-alcoholic beer is now available in a consumer friendly, lower calorie, lower carb 6x330 mL can format across Canada. Originally brewed in Germany over 40 years ago with the ambition that great tasting beer does not have to contain alcohol, the Clausthaler family of non-alcoholic beers continues to attract health-conscious beverage enthusiasts for their innovative approach and award-winning taste. For more information on how these brands can complement your beverage assortment, please reach out to Premier Brands.

Mutti® Finely Chopped Tomatoes (Polpa) are made with just two ingredients – sun-ripened 100% Italian tomatoes and a pinch of Mediterranean sea salt. Picked when perfectly ripe, these tomatoes are cold crushed, and processed with a patented technique, capturing the flavour of just-harvested tomatoes. They are so remarkably fresh, consumers can try them straight from the can! Excellent for a fast tomato sauce, gazpacho, or even bruschetta.

Blue Buried Treasure This spring Muskoka Brewery will feature its latest collaboration with Kawartha Dairy - Blue Buried Treasure, a Lactose Pale Ale that is true to Kawartha Dairy's original frozen treat. Each sip is bursting with juicy blueberry and pomegranate, a creamy mouthfeel enhances decadent sweet vanilla. For a real treat, consumers can combine the ice cream and the beer for a proper float.

Bring on the Bagels Dempster’s is introducing a new lineup of Signature Bagels for Canadian consumers perfect for when a simple sesame seed bagel just isn’t enough and they are looking for a little something extra. Baked in Canada, Dempster’s Signature Bagels are baked with their simplest ingredients recipe with no artificial flavours or colours. The new mouth watering flavours include: Four Cheese, Banana Chocolate Chip Flavour, Parmesan Garlic & Herb Flavour, Blueberry Flavour, and Maple French Toast Flavour.


Shopper research

Our exclusive research reveals what Canadians  think about the grocery shopping experience


By Shellee Fitzgerald Illustration by Tracy Walker

February 2021 ||  CANADIAN GROCER 21

Shopper research

Shopping frequency Most shoppers (62%) frequent a chain grocer at least once a week while one in three (37%) shop a discount supermarket on a weekly basis.


shop at a chain grocery store once/week or more || 4% never shop


shop at a discount supermarket once/week or more || 21% never shop


shop at an independent grocery store once/week or more || 30% never shop

What’s most important to shoppers when deciding which grocery store to shop? What do they really think about loyalty programs? How satisfied are they with the online experience? What are their biggest peeves when grocery shopping? And how is the COVID-19 crisis influencing their shop? The answers to these questions and many more are revealed in our new study on grocery shopper habits and preferences in Canada. We worked with the research team at EnsembleIQ (Canadian Grocer’s parent) to produce the 2021 GroceryIQ Study: Taking Stock of Grocery Shopper Attitudes and Behaviours. One thousand shoppers (primary and shared decision-makers) across the country were surveyed to get a better handle on how shoppers are feeling and behaving in these extraordinary times. Here are some key findings from the study:

Where they shop Three in four (77%) shop the same grocery store each time, but of the shoppers who do not, a majority are shopping across 3+ stores and millennials indicate a higher likelihood to shop at 4 or more stores compared to baby boomers.

# of Grocery Stores Regularly Shopped

4+ stores


2 stores

77% of shoppers


shop the same grocery store each time

Shoppers who do not shop same store each time 3 stores



How they decide where to shop Most important factors to grocery shoppers when determining where to shop Product pricing Product freshness Products needed in-stock Product quality Convenient location Sales and promotions Variety of products Store cleanliness Rewards/loyalty program Sanitation/safety measures enforced Speed of shopping trip

22  CANADIAN GROCER || February 2021

STORE PREFERENCES & PERCEPTIONS Perhaps it’s not surprising that amid such economic uncertainty, price is the most important factor to shoppers when deciding where to buy their groceries. According to the study, four in five shoppers (81%) said price was the most important factor. This was followed by product freshness (75%) and that the products they needed were in stock (72%). When asked to rate their primary grocery store’s performance, more than half of shoppers indicated they thought their store was excellent/very good across a range of attributes, from variety of products available to store cleanliness and store organization. Perhaps a sign of the times: only 40% of those surveyed thought the store was “fun to shop.” The study also revealed retailers may want to keep an eye on staff helpfulness, as nearly one in five shoppers rated this attribute as “fair or poor.”

81% 75% 72% 71% 70% 69% 66% 62% 50% 47% 44%

•  Survey sample:

1,000 grocery shoppers •  Ages 18+ •  Reside in Canada •  Shop at grocery stores at least once a month and are the primary or shared decision-maker for household grocery shopping •  Survey fielded October 2020

Shoppers' pet peeves Areas where the store most needs to improve Nothing—no changes needed Out-of-stocks/product availability Need more cashiers/lines and wait is too long Lack of/poor customer service Prices too high Produce department—Quality & selection Enforcing covid-19 policies Need better variety/selection Store layout/organization/Can't find products Store cleanliness/smells Need wider aisles/more space

And the biggest pet peeves of grocery shoppers? No big surprises: out-of-stocks, long wait times at the checkout, poor customer service and high prices are the things shoppers identified as needing improvement. The good news is that 16% of shoppers said their primary store does not need any improvement whatsoever.

7% 7% 5% 4% 4% 4%  3% 2%

16% 15%  11%

"They just recently reorganized the store, and it is confusing and hard to find what I need."

In their own words "Having flyer items not in stock, especially those on sale a few days into the sale."

"Lack of cashiers at checkout. Can't get over three cashiers on at 4 p.m. on Friday (Oct. 9) waited approximately 15 to 20 minutes to check out."

“Price of some things is several dollars more than at another place for the exact same thing, which can be frustrating. Also no ad match.”

Loyalty programs , flyers & promotions Shoppers' awareness and enrollment in grocery store loyalty programs

LOYALTY PROGRAMS Loyalty programs were generally viewed favourably by grocery shoppers in Canada. According to the study, 67% of shoppers actively use their store’s loyalty program and nearly as many (63%) are “extremely or very” satisfied with it. Loyalty program hold-outs indicated they are discouraged by the volume of purchases needed to earn rewards (20%) or generally don’t feel the rewards are of value (19%) or they already belong to too many loyalty programs (17%).

How satisfied shoppers are with their grocery store's loyalty program


Not very/not at all satisfied


Somewhat satisfied


Extremely/ very satisfied

67%  I am enrolled and actively use 16%  If the store had one I would enroll 5%  Don’t know 4%  I am enrolled but do not use 4%  I am not enrolled 4%  Would not enroll even if they did have one

How shoppers use flyers 47%  Look at digital flyers before heading to store 35%  Look at the flyers in mail before heading to store 16%  Look at a digital flyer on phone while in-store 14%  Pick up flyer in-store to look at 17%  I don’t use flyers

83% of shoppers

Likelihood to wait for promotional offer: beginning of pandemic, today and after pandemic Extremely/very likely Somewhat likely Not at all/not very likely Beginning of pandemic


Today — during pandemic


After pandemic


34% 35% 37% 28% 33% 24%

use store flyers in some way

February 2021 ||  CANADIAN GROCER 23

Shopper research IN-STORE VS. ONLINE SHOPPING Much has been written about the acceleration of online grocery shopping over the course of the pandemic and our research revealed that 3% of shoppers completely avoided shopping in-store, instead opting to buy their groceries online. For online shoppers, generally, curbside pickup and contactless delivery options had a slight edge over in-person delivery and buying online for in-store pickup. This is likely for convenience (to save time) and efforts to minimize COVID-19 exposure. So how did they feel about online shopping? Just 43% of those who shopped online for groceries said they were “completely/very satisfied” with the experience, indicating there’s room for retailers to make improvements. Shoppers listed out-of-stocks, expensive fees and poor substitutions as some of the reasons for their dissatisfaction with the service. While most shoppers surveyed were not avoiding in-store shopping, more than half said it was “really important” for retailers to ensure they are implementing safety measures such as requiring customers and staff wear face masks, sanitizing carts between customers and are demonstrating that the store is frequently cleaned. Interestingly, when asked to think about how they plan to shop in a post-pandemic world, most survey respondents said they expected to shop for groceries in-store at a similar level as they do today, with 19% saying they expect to increase their time in stores once the crisis passes.

In-store & online shopping 86% of grocery trips (over a month) were completed in-store. Of the buy-online methods, curbside pickup had a slight edge

86%  Shopping in-store

5% buy online for curbside pickup

4% buy online for contactless delivery

3% buy online for in-person delivery

2% buy online for in-store pickup

Overall, how satisfied are you with your experience(s) using online shopping for groceries? 43%  Completely/very satisfied 44%  Somewhat satisfied 13%  Not very/not at all satisfied

Which of the following are reasons why you are not completely satisfied? Product(s) I needed were out-of-stock Fees are too expensive Unhappy with product substitutions Unhappy with quality of products Store does not offer delivery Order was picked incorrectly Pickup/delivery window too far out Process is too complicated Store does not offer curbside pickup

44% 35% 29% 22% 16% 15% 14% 14% 8%

WHAT’S IN THE CART? When asked about their food purchases at grocery over the past month, shoppers were clearly focused on fresh with fresh

Store cleanliness How important is it for you that grocery stores provide the following sanitation and safety measures for customers when shopping in stores today? Customers required to wear masks Carts/baskets sanitized between customers Employees required to wear masks Sanitizer stations for customers

67% 20%


64% 27%  9% 63%



62% 29%  9%

Check-out areas sanitized between customers

54% 33%


Dividers installed at check-out

52% 34%


Indications store is frequently cleaned

51% 35%

Store limits number of customers in-store Markers/signage to indicate 2-metre distance Special shopping hours for vulnerable populations One-way aisles Employees wear disposable gloves 24  CANADIAN GROCER || February 2021


47% 36%


42% 40% 38% 40% 33% 37% 29%


18% 22% 30% 34%

Really important Somewhat important Not concerned

What real sandwiches are made of, naturally.


#TOONIECHALLENGE We’re helping feed local children breakfast. 100% of donations benefit children in this community!

Join us! #TOONIES4TUMMIES #TOONIECHALLENGE NESPRESSO® and capsule design are trademarks of Société des Produits Nestlé S.A. and used with permission. Pike Place is a registered trademark of The Pike Place Market PDA, used under license. Keurig®, K-Cup®, Keurig Hot and the K logo are trademarks of Keurig Green Mountain, Inc., used with permission. ©2021 Starbucks® and the Starbucks logo are registered trademarks of Starbucks Corporation used under license by Nestlé. All rights reserved. Product may vary by store.


Shopper research

Prepared food Purchased prepared food at grocery in the past month

63% Purchased

prepared food at grocery in the past month

1.9 Prepared food

items were purchased, on average, by shoppers in the past month

Reasons why they did not purchase prepared food at grocery in past month Prefer not to purchase at grocery I didn't plan to purchase when I went to store Too expensive Didn't like selection Safety/cleanliness concerns due to covid-19 Lack of healthy choices Wasn't hungry when I was in-store Didn't look appetizing Not shopping in-store due to covid-19 Preferred items not available due to covid-19

39% 31% 31% 9% 8% 8% 7% 7% 5% 3%

Meal kits Awareness and experience with meal kit solutions offered by grocery store where prepared foods are purchased 32%  Don't know if store offers meal kits 13%  No, store does not offer and would not try if did 14%  No, store did not offer but would try 25%  Yes, store offers but have not tried 16%  Yes, store offers and have tried

41% of shoppers

produce purchased by 88% of shoppers, while dairy was purchased by 85%, bread/ bakery by 82% and meat/seafood by 75%. Among the non-food categories, paper products (66%), personal care (54%) and sanitizing and cleaning products (47%) were among the top purchases. Shoppers were also asked about their interest in purchasing beer/wine/cider at grocery stores. Of those shoppers living in a province where alcohol is not available at grocery stores, 77% said they would like to it to be, citing the convenience of one-stop shopping as the main reason. And how did they pay for these purchases? No surprise, the bulk of purchases (88%) were paid for with credit or debit cards, with cash accounting for just 8% of transactions—likely another impact of the pandemic. PREPARED FOOD & MEAL KITS Grocers have been ramping up their prepared food offer in recent years and the survey showed shoppers have an appetite for it. Nearly two-thirds of shoppers purchased prepared food from a grocery store, with entrees (rotisserie chicken, sushi, etc.) being the most popular among these shoppers with 60% purchasing. And 61% indicated they were completely/very satisfied with their most recent prepared food purchase. Shoppers said the most important factors they considered when purchasing prepared foods at grocery were freshness, price/value, taste and quality. Dinner, by far, is the most popular occasion for prepared food purchases at grocery, indicating there are opportunities for retailers to expand or promote breakfast and snack-time offerings. And how do grocers’ prepared foods

Likelihood to purchase if grocery store offered more meal kit solutions

say grocery store offers meal kits

19%  Extremely/very likely 45%  Somewhat likely 36%  Not very/not at all likely

26  CANADIAN GROCER || February 2021

mea­s ure up? The study revealed that just over half of shoppers considered prepared foods from grocery stores as similar to that found at fast casual and fast food restaurants, but there is room for improvement, with 35% believing the food purchased at fast casual restaurants is better than that offered at grocery. And what about meal kits? Just 41% of shoppers said they were aware of meal kit solutions at their store, and of that number only 16% have tried them. There is interest, and perhaps opportunity, around meal kits with 64% of survey respondents indicating some degree of likelihood that they would purchase these items.

Convenience & technology Self-checkout remains most popular with two in five shoppers ranking it the service they would be most likely to try if available. Mobile app-driven services rank last, possibly a result of being unfamiliar with new technologies. Ranked in top 3 Ranked 1st % of shoppers ranking likelihood they would use service at grocery store if it was available to them

69% 57%




38% 32%

HEALTH & SUSTAINABILITY It’s no secret that health and wellness is important to Canadians, and our survey confirmed the fact with a majority (71%) of shoppers indicating they are health conscious. When asked about their satisfaction with the selection of healthy/ better-for-you products at grocery stores, however, about half (55%) said they were “somewhat satisfied,” suggesting this area could be improved. The health of the planet also matters to shoppers. The survey revealed that a majority of shoppers (64%) could be motivated to switch stores based on a retailer’s sustainability practices. The most important ways for stores to demonstrate their commitment to sustainability is by donating food instead of tossing it out (56% of shoppers said this was “really important”), have reusable bag incentives, local sourcing of produce and animal products, and demonstrate a movement towards zero waste. CG



16% 10% 5%

5% Selfcheckout at register

Mobile coupon/ discount

Order online, pickup curbside

Home delivery

Order online, pickup inside store

Selfcheckout with mobile app

5% Mobile payment app

Commitment to sustainability How important is it to you that grocery stores demonstrate a commitment to the following sustainability-related practices? Donate food instead of throwing out


29% 8% 7%

Reusable bag incentives


35% 15% 6%

Locally sourced produce/animal products


Recycling containers for local use


38% 14% 9%

Movement towards zero waste


39% 16% 7%

Ethical sourcing policies


Eliminate plastic bags/packaging


Energy-efficient equipment/fixtures


Electric vehicle charging stations


41% 11% 6%

39% 15% 9% 37%  20%


42% 21% 11% 21%  51%


Really important Somewhat important Not concerned Don't know

Likelihood to switch to a store demonstrating stronger commitment to sustainability 17%  Extremely/very likely 47%  Somewhat likely 36%  Not very/not at all likely

Nearly 2 in 3

(64%) indicate some degree of likelihood they would switch their primary grocery store based on its sustainability practices. February 2021 ||  CANADIAN GROCER 27

Health & wellness


WINNING THE health and wellness consumer In store and online, there’s a wealth of ways grocers can meet customers’ lifestyle, dietary and even medical needs By Rebecca Harris

Today’s health-focused shoppers aren’t just stalking the aisles to find the latest juicing-fad items or whatever vegetable is the “new kale.” They’re hungry for the whole health and wellness package—from information and education, to customized dietary choices, to mental well-being moments, to healthcare solutions. This presents a unique opportunity for grocers, who come by the health and wellness space, well, naturally. “Food is a natural gateway for grocers to expand into the health and wellness space and to have credibility there—it’s a very logical extension of their core business,” says Carol Spieckerman, retail consultant and president of Spieckerman Retail. “Health and wellness itself encompasses such a broad spectrum of categories, products and solutions; therefore, it’s a big bet and a big opportunity that very few other categories offer ... I really can’t think of another opportunity with that scope and potential.” Research shows shoppers increasingly see their grocery store as an ally for personal/family health and well-being goals. According to the Food Industry

February 2021 ||  CANADIAN GROCER 29

Health & wellness Association’s (FMI) U.S. Grocery Shopper Trends 2020, in February 2020, 51% of shoppers agreed their primary grocery store is on their side when it comes to helping them stay healthy. That shot up to 62% in mid-April, amid the growing COVID-19 crisis. “As an essential service provider, the grocery store has always been a local community resource,” says Krystal Register, director of health & well-being at FMI. “However, now they’re enhancing their offerings to be trusted allies as a healthcare destination and one-stop solution.” For grocers, providing all things health and wellness to shoppers can have vitalizing effects on the business. “It’s an opportunity to drive customer loyalty, drive sales in higher-margin categories, and drive frequent traffic to stores, which is what grocery retail is all about in the first place,” says Spieckerman. In FMI’s Food Retailing Industry Speaks 2020, grocers say health and well-being is the top factor positively impacting sales and profits (75%), followed by leveraging food to manage or avoid health issues, or “food as medicine” (71%). “On the industry side, there’s a positive impact on business, as retailers have adapted to ensure shoppers and employees are focused on staying safe and healthy,” says Register. On the consumer side, there’s growing interest in the connection between food and health. “It’s got a new focus now amidst the COVID-19 pandemic with shopper trends and general health concerns,” says Register. “So, the time is right to match those two perspectives up and make sure retailers are meeting consumers’ needs because they’ve got a captive audience. Consumers are actually seeking help.”

Serving body & mind The pandemic is expected to have lingering effects on health and wellness shoppers’ food choices, with many prioritizing their immune health well into 2021. In The Hartman Group’s Functional Food & Beverage 2020 Report, released in June, immunity topped the list of current use/interest in supplements by condition. Thirty-one per cent of respondents said they’re using immunity-boosting supplements and 37% said they’re interested in using them. While immunity was already a rising area of interest for consumers, The Hartman Group said what’s happening in the current environment pushed it to the top of the list. In the functional food category, immunity was sixth on the list, with 19% currently using functional foods for immunity and 48% interested in doing so. “[For retailers], being clear with one’s health and wellness offerings and the extent to which they ladder up to things like immunity is going to be very important,” says Shelley Balanko, senior vice-president of The Hartman Group. “In years past, consumers were focused on healthy digestion because they understand it is the root of all wellness. But today, they’re focused on healthy digestion in the service of reducing inflammation and improving 30  CANADIAN GROCER || February 2021

The way to win today’s health and wellness consumers isn’t just to help them cross items off their immuneboosting shopping lists. They need to tie in the physical benefits of foods with the mental and emotional benefits

overall immunity because they understand immunity is a long-term objective.” The way to win today’s health and wellness consumers isn’t just to help them cross items off their immune-boosting shopping lists. They need to tie in the physical benefits of foods with the mental and emotional benefits. Take elderberry tea, for example. “That’s a great moment of pause for taking a mental health break but also reinforcing immune function,” says Balanko. “It’s about marketing and merchandising products [to convey that] the retailer is approaching wellness holistically from a mind and body perspective.” The “mind” part also means helping consumers incorporate brain-boosting foods into their diets. “The consumer is defining wellness more holistically—it’s not just a healthy body; it’s certainly a healthy mind, and that includes one’s emotions but also one’s cognitive functioning,” explains Balanko. That’s given rise to interest in nootropics, a class of substances that support cognitive functions such as memory, focus and creativity. “Being on point mentally is really important—not just to aging consumers who might be struggling with memory issues or wanting to stave off dementia,” says Balanko. “We see a fairly large portion of millennial and gen Z shoppers interested in improving their cognitive health.” Natural food retailer Goodness Me! is one grocer that connects all the mind/body dots for customers. It offers webinars and online classes on a range of mindfulness, self-care and well-being topics, including yoga and emotional release therapy. The approach mirrors the retailer’s product offering, which includes not just groceries but supplements, natural health and beauty products. “Health and wellness is more than just ‘I’m going to buy that healthy-fats snack bar,’ it’s the whole-basket shop of better-for-you groceries—plus the thought that transcends food: ‘what products am I putting on my skin?’” says Laura Collaton, chief revenue officer at Goodness Me! “That’s why we focus our webinars and education on whole wellness. The idea is, ‘How do I feel today? Am I checking in with myself?’ All those things are 360-degree wellness for us, and that’s what feeds not only our business, but our understanding and partnership with our customers.”

Customized wellness Whether it’s products or education, the key for retailers is to take a customized approach, giving health and wellness shoppers what they want, when they want it. “With the on-demand nature of the way content is going in every segment, people want things to be as tailored to their eating trends, styles and preferences as possible,” says Collaton. “They also have less patience when things take up too much brain space or take too much work.” If a customer wants to try the keto diet, for example, customers want grocers to make it easy for them.

Making things easy for customers is the approach Metro is taking with its new “My Health My Choices” program, which is designed to help customers find food and beverage products that meet specific dietary needs. The program categorizes nearly 9,000 products under one or more attributes (there are around 50 in total), including keto-friendly, vegan, fat-free, organic and lactose-free. In stores, product attributes are displayed on shelf labels and Metro app users can scan product barcodes to learn more. Online, customers can click on a particular category and shop all the products in the category and filter them by section, such as frozen food or beverages. “Understanding product claims can be complex and even overwhelming for some people—every package is like a billboard of marketing messages,” says Mike Thomson, Metro’s vice-president of grocery merchandising. “There are many certifications like organic and B-Corp, along with the ingredient [list] and Nutrition Facts table that is mandatory on every package. So, we tried to come up with something that simplifies that for the consumer and takes some of the homework out of it.” For Metro, the guide allows it to take some of the guesswork out of understanding health and wellness shoppers. “In our internal database, we’ll be able to analyze gluten-free products against other gluten-free products, or lactose-free products against other lactose-free items,” explains Thomson. “Our vendors will be able to see it as well ... and [we] think that will help them understand where their opportunities are and perhaps where there’s an opportunity to innovate. It will also help our category managers and merchandisers make the best possible assortment decisions.” Data is definitely a big play for grocery retailers. Myles Gooding, national retail & consumer lead at PwC Canada, sees a big opportunity for grocers to understand the “how” behind health and wellness purchases by having more robust data. The idea is to “cross-pollinate” consumers’ health behaviour into their buying habits, leveraging attributed data to understand those buying patterns, says Gooding. For example, a shopper persona might be someone who is on cholesterol medication and wants to live life better and is going to follow the doctor’s rules. “Grocers have an opportunity here to buy into the lifestyle, so to speak, and make a fundamental shift from managing and buying products on a transactional level and really understanding how the consumer shops for their health and for their lifestyle,” says Gooding. “That puts a retailer across a lot of categories versus just looking at a product by itself.”

Health goes digital Another growing area of opportunity for grocery retailers is virtual health and well-being offerings. “We see great opportunities when it comes to enhancing digital communications, e-commerce

“With the on-demand nature of the way content is going in every segment, people want things to be as tailored to their eating trends, styles and preferences as possible. They also have less patience when things take up too much brain space or take too much work”

and health and well-being,” says FMI’s Register. For example, retailers can do virtual store tours, create videos to help kids with food and nutrition information, and offer one-on-one telehealth virtual visits to personalize nutrition education. Loblaw is making a big bet in the virtual healthcare space with the recent launch of its PC Health app, which provides users with personalized tools and recommendations based on their virtual health needs and goals. The app, which is currently available in Atlantic Canada, Ontario and British Columbia, gives Canadians free access to registered nurses and dietitians via virtual live chat. The app also provides educational content along with daily goals and activities that, once completed, earn users PC Optimum loyalty points. Loblaw plans to expand the PC Health app nationally, as well as give users access to real-time virtual care from pharmacists, family doctors and specialists, directly on the app. Similarly, in the United States, Midwest grocer Hy-Vee recently launched a new dietitian services platform, Healthie. Some services are free, including virtual store tours, “dietitian discovery sessions” and monthly virtual classes led by a Hy-Vee registered dietitian. Consumers also have the option to pay for services, such as the Healthy Habits menu program (US$99), which provides meal plans and product recommendations, and personalized nutrition counselling packages (US$125 to US$250). Spieckerman says what’s good about the Loblaw program is the company doesn’t appear to be trying to monetize it directly by charging customers for the health and wellness services. “I like the idea that Loblaw is focusing on the value they can bring to customers first.” For Spieckerman, Loblaw exemplifies another big movement we’ll be hearing more about: telemedicine. Through its Shoppers Drug Mart subsidiary, Loblaw acquired a minority stake in telemedicine company Maple Corp., which helps connect people with doctors and specialists using a smartphone or computer. “Telemedicine is something many retailers are talking about and that’s going to be the next big thing. In that regard, for a grocer particularly, I think Loblaw is on the cutting edge.” For smaller chains or independent retailers that aren’t in a position to make big moves like this, there are still a number of great ways to engage with health and wellness shoppers. “As corny as it sounds, always think in terms of providing value first,” says Spieckerman. A relatively inexpensive place to start is content, whether it’s providing education in-store and online, or hosting forums on health and wellness topics. “The overarching goal is to monetize the health and wellness opportunity, but also to become more meaningful to your customers across more areas of their lives,” she says. “Keep them on your platform and within your ecosystem, giving them fewer reason to seek insights, solutions and products elsewhere. That really is the name of the game.” CG

February 2021 ||  CANADIAN GROCER 31

While e-commerce gets much of the attention these days, innovative in-store technologies continue to be adopted, too—many of which aim to solve pandemicrelated challenges By Carol Neshevich & Rosalind Stefanac

32  CANADIAN GROCER || February 2021

Shelf-level innovators In pandemic times, shelf cameras that automatically detect low inventory and out-of-stock items are proving more useful than ever. With grocers already under pressure to fulfill more online orders for pickup/delivery, knowing what’s in stock at all times allows them to do that more efficiently, with fewer unavailable items to frustrate customers, says Jeremy Pugh, vice-president of sales at Focal Systems, which has been working with Walmart Canada to deploy shelf cameras across its stores nationally. “We have definitely seen COVID accelerate the adoption of these cameras in grocery,” says Pugh. “If you look at where grocery is going, not having realtime insight into product availability is akin to bowling and not knowing how many pins you’re hitting.” Not only has the price point of shelf cameras become more attractive in the last 12 months, Pugh says advances in the technology’s accuracy are


Tech in the time of COVID

LIKE EVERYTHING else in the world, in-store technology trends have been influenced by COVID-19. And while much of the current tech-related grocery news we hear tends to centre around e-commerce, retailers continue to invest in tech for brick-andmortar stores, with many of those investments directly related to needs magnified by pandemic-era shopping challenges. From shelf-level tech and payment innovations to robots and even queuing apps, Canadian Grocer chatted with the experts to get the scoop on a number of interesting and innovative in-store technologies currently grabbing attention.

Tech trends enabling a quicker return on investment. “We now have several billion product images in our training data to the point where [the camera] outperforms humans walking up and down those aisles,” he says. Through the use of artificial intelligence, he says grocers can also expect these cameras to become even more adept at making valuable recommendations. “They’ll be able to make small decisions every second of the day to make the store run more effectively and drive higher profitability,” he says. With so many innovative technologies coming into the retail realm now, grocers will need to find that “sweet spot” between enhancing customer experience, improving labour efficiency, demonstrating innovation and making sure there is a business case, says Robin Sahota, managing director, retail Canada at Accenture in Toronto. “Certainly, there is a role for shelf cameras to help ensure accuracy that what’s on the shelf is actually there, but I think we’re still early days on the technology being rolled out more broadly.” In fact, he expects a clearer ROI coming from electronic shelf labels (ESLs), which can be used to make real-time price changes to quickly match competitors and better engage shoppers. “This allows employees to focus on higher-value tasks rather than price tag changes, which can be so labour intensive,” he says. While European grocers have been using ESLs for a while, their adoption in the North American market has become more pronounced in the last few years. In 2019, Loblaw initiated a major ESL deployment— the chain now has electronic shelf labels in almost 350 stores; the largest of which have around 40,000 electronic shelf labels installed, with the average being closer to 20,000 ESL tags per store. Sahota says the potential for ESLs to relay product origin and nutritional info, as well as communicate other promotions, is the sort of “next level of evolution in customer engagement that companies are starting to think about.” To that end, U.S. grocery giant Kroger partnered with Microsoft to develop a proprietary EDGE (Enhanced Display for Grocery Environment) Shelf that uses digital displays to show prices, promotions and nutritional information. The grocer says it will also be using its EDGE Shelf to sell digital ad space to consumer packaged goods brands based on things like customer demographics.

How do you want to pay? Conventional cash may go the way of the dinosaur even sooner than expected as innovations in payment technologies continue to roll out. Electronic payments represent 77% of total payment volume, according to the Canadian Payments: Methods and Trends 2020 report (released in November 2020 but based on 2019 data) from Payments Canada, which owns and operates Canada’s payment infrastructure. Payments Canada reports that in the early months of the pandemic, 40% of Canadians avoided retailers that did not accept contactless payments, a trend

“We have definitely seen COVID accelerate the adoption of shelf cameras in grocery. If you look at where grocery is going, not having realtime insight into product availability is akin to bowling and not knowing how many pins you’re hitting”

expected to continue as concerns around virus transmission through surfaces persist. Senior director Andrew Holyome says Canadians continue to adopt new ways to pay, with 34% of those who own wearables (such as smart watches) saying they’ve used them to make a purchase. “We are really moving towards digital payments, and grocers have to stay on top of these trends and understand where their customers are going,” he says. When it comes to digital payment innovations on the horizon, analysts point to initiatives for grocery that go far beyond self-checkout units. Facial payment technologies currently used in China allow shoppers to make a purchase simply by posing in front of point-of-sale machines equipped with cameras. Last October, Amazon announced a new palm-recognition system at its Amazon Go stores in Seattle, where shoppers scan their hands at the entrance to get items they choose automatically charged to their credit cards. Several vendors are also developing touchless checkout systems that use computer vision to recognize objects the same way our eyes do. (Amazon is already using computer vision in its smart shopping carts.) Voice technology is another area gaining traction in autonomous checkout in an effort to reduce physical contact. French grocery chain Carrefour has partnered with Google Assistant to bring voice-enabled grocery shopping and checkout to its shoppers, while Walmart is exploring a similar scenario with Apple’s Siri. Doug Baker, vice-president of technology at the Food Industry Association (FMI), says some form of autonomous checkout will eventually be where the majority of the industry lands. But there are still issues to iron out, particularly when it comes to dealing with random weight items and produce. “Scalability is also a challenge and that’s why we’re not seeing more of these options in conventional stores,” he says. While he says COVID “has absolutely accelerated” innovation in digital payment options, he expects there will always be a hybrid of payment models in the future. “If we didn’t feel comfortable with technology before, we will now; but once we get to the other side of this [pandemic], I still think the grocery store will be a destination where you also come to talk to people,” he says.

To robot, or not to robot? There’s been plenty of buzz in recent years about robots in retail, with these machines being “employed” in jobs ranging from inventory to cleaning to even making salads. But the news in November 2020 that Walmart would be abandoning its inventory robots program (in place since 2017, in about 500 stores, with robots roaming the store scanning shelves to keep track of inventory) may have left some industry watchers wondering: is this a sign of a fizzling future for robots in grocery retail? »

February 2021 ||  CANADIAN GROCER 33

Tech trends

34  CANADIAN GROCER || February 2021

safety perspective; versus a salad-making vending machine, which maybe isn’t quite as versatile.”

A better queuing experience

In an effort to step up disinfecting processes, grocery firm Ahold Delhaize USA announced in January it was launching a pilot of ultraviolet disinfecting robots in partnership with Ava Robotics

Long, socially-distanced lineups just to enter the store are undoubtedly a new experience in the COVID era, and the tech industry has stepped up to help with challenges related to limiting customer capacity. To manage customer volume and enforce social distancing, Ipsos Channel Performance, for instance, recently updated its customer counting tool to show the live count of visitors in the store at any given time. In the United Kingdom, grocers Sainsbury’s and Asda recently rolled out virtual queuing apps, which virtually notify customers when they’re at the “front of the line” without them having to wait in an actual line (they could be in their cars, for instance). Similarly, “Walmart is offering [capability] on its app where you book time when you’re going to go to the store and it buzzes you when your turn comes up, so you can just get out of your car and go straight into the store,” says Kantar’s Singh. “Queuing technology has actually been around for years,” says PwC’s McOuat. “It’s not a new technology, it’s just that queuing wasn’t a big issue when it came to grocery before.” Marty Weintraub, national retail leader at Deloitte Canada, adds that our cold Canadian winters might make things like queuing apps even more attractive. “We’re in winter now. There is talk about what happens if people are having to queue outside in -10 C, -15 C? What do we do?” he says. Still, Weintraub isn’t sure queuing tech will be widely adopted, “because I think the next few months will be critical on two fronts. One is, when does wave two start to come down? And when do we have confidence that the vaccines that are starting to roll out now will actually roll out and actually have that efficacy that we’re hearing about?” If the end of store capacity restrictions and lineups are in sight, it may not seem worth the investment. He points to how temperature-checking technology and thermal cameras to detect fevers were a hot idea early in the pandemic, but never really took off as the months wore on. Due to expense and impracticalities (not everyone with COVID has a fever), “those ideas came and went in the early days.” Overall, Weintraub believes grocers would be wise to invest in technologies that were attractive prior the pandemic but have now become more crucial, such as “reducing friction at the checkout, whether that’s scan-and-go, or touchless, or robots;” or shelflevel tech—“on-shelf availability was important before, and guess what? It’s even more important now,” he notes. That said, one new concern brought about by the pandemic that he does see sticking around is hygiene—so sanitizing robots, cart cleaning tech and the like. “Even if vaccines roll out, and even if efficacy is high, people will still be what I call ‘a little bit OCD’ on cleanliness for some time after the pandemic goes away.” CG


“When you look at that Walmart example of getting rid of the shelf audit robots, a lot of people jumped up and down and said, ‘Oh, that’s the death of shelf audit robots.’ And I would say, ‘It might be the death of shelf audit robots at Walmart, but it’s certainly not the death of shelf audit robots in [other chains],” says Steven Keith Platt, research director at the Retail Analytics Council and lecturer at Northwestern University. It’s not even the death of robots at Walmart, as the retailer still uses other types. “They continue to roll out their autonomous floor scrubbers,” for example, he says. “Other iterations coming down the pike [for retail stores] are security robots,” Platt adds. “Some retailers are not going to be very comfortable with that, but others are.” And in an effort to step up disinfecting processes, grocery firm Ahold Delhaize USA announced in January it was launching a pilot of ultraviolet disinfecting robots in partnership with Ava Robotics. “That’s the first pilot [of disinfecting robots] we’re aware of,” says Platt, “however, we’ve been discussing this with robotics firms since March, and there are a couple of others that are going to be coming out.” Still, the high implementation costs and even legal/insurance issues can make it difficult for many grocers to justify bringing in robots. “The insurance companies are not very comfortable having robots and people [in store] at the same time, for obvious reasons; if there’s a malfunctioning or something happens it’s a huge insurance liability,” says Amar Singh, principal analyst at Kantar Consulting. “So this is something that still needs to be figured out.” Anita McOuat, national technology, media, telecommunications & consumer markets leader at PwC Canada, agrees cost is a major consideration, with some robot applications being a more practical investment than others. She describes “smart cart” innovations that fall into the robot category, such as LG’s self-driving cart that follows you around the store: “You don’t have to touch it. You put your stuff in, the cart is calculating what you put in there, and as you’re exiting the store, you don’t have to interact with anybody and payment is just being charged to your card,” she says. Then there are the robots that “reduce high-touch activities like salad bars or ramen noodle bars where you [normally] would add the toppings yourself … so the idea of a robotic vending machine; we saw a lot of those rollouts in the United States in 2020 on a pilot basis,” she says. “They’re expensive, and they’re very specific and not that versatile. So, the question for a retailer is, is this driving enough incremental sales or improving my customer experience enough that it’s worth scaling out these expensive machines? Or is it just a novelty item?” In comparing these two, she says, “I think the smart carts are very expensive, but you can see how that could actually change a customer’s experience as they navigate the store, both from a convenience perspective and health and



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RISING TO THE OCCASION With loads of innovative new options to appeal to home-bound consumers, bread sales aren’t loafing around By Michele Sponagle

Until fairly recently, industry watchers had been flagging the decline of bread. Thanks to the popularity of keto diets and carbs being painted as nutritional bogeymen, sales were on a downward trajectory. But in 2020, COVID-19 had consumers embracing bread in an unprecedented way. The early days of the pandemic saw shelves emptied as soon as they were filled and producers struggled to meet demand as customers loaded their pantries. Bread, it seems, is anything but dead, and all signs point to bright days ahead for the staple. “Bread was in decline for a long time,” says Jo-Ann McArthur, president and chief strategist at Nourish Food Marketing. “But there has been a shift … We’re back eating three square meals a day, often at home. In extraordinary times we reach for the ordinary. Bread is a comfort food.” As has been well documented, during the pandemic, house-bound

February 2021 ||  CANADIAN GROCER 37

Aisles consumers took to baking bread in a big way, causing shortages of flour at grocery stores. But as McArthur notes, “If you look at Google Trends research, [searches for] bread recipes peaked in April and they’ve trended downward ever since.” Consumers, it seems, concluded that bread baking is not so easy and perhaps best left to professionals. They went back to purchasing bread at the store—and began buying much more of it than in recent years, the data confirms. Nielsen figures show prepackaged bread in Canada experienced a 6% bump in sales, reaching nearly $1.8 billion in the 52 weeks ending Jan. 2, 2021. Along with sales growth, the way bread itself is defined has evolved. “It used to be [regular] flour, water, yeast or some other leavening agent,” explains McArthur. “Now, bread may be made with low GI [glycemic index] flours, like those made from coconut or beans.” Consumers want bread, but better-for-you varieties are appearing in greater numbers including those that are gluten-free, made with clean ingredients, fortified with wellness-boosting seeds, sprouted grains and spices such as turmeric. Millennials are also seeking new offerings—perhaps a revisit of interesting breads enjoyed at restaurants and on vacation (pre-pandemic, of course)—coupled with convenience. That has opened the door for par-baked and frozen loaves to grab a bigger slice of the market. Grocers with an on-site bakery have an edge, too, McArthur notes. “They can pivot quickly to respond to customer needs.” Denninger’s, which has five grocery stores in southwest Ontario, has invested significantly in expanding its on-site baking capabilities over the last three years, and it has been paying off. “It has allowed us to grow our offering of European-inspired bread,” says Nathalie Coutayar, marketing and procurement manager. “There has been a tremendous increase in the demand for artisan varieties.” The grocer’s bestsellers include light rye, sourdough and baguettes. The new year will see more innovation in Denninger’s bakery department, says Coutayar, noting it will be rolling out seasonal choices and sweeter breads made with fruit and nuts. Brioche is proving to be a hot variety. “We couldn’t even sell a single one a couple of years ago,” she says. “Now it’s our highest-growing category.” At Toronto’s Summerhill Market, 38  CANADIAN GROCER || February 2021

Four ways to boost bread sales

• • •

Wave the flag. Call out products that

are made in Canada and bakery items featuring Canadian ingredients.   Let the aroma of bread entice customers by placing freshly baked items near check-out lines and store entry points.   Be aware of price-point sensitivity in the category and offer price promotions to encourage trial of new products by con­­sumers looking for budget-friendly options.   Create solution-based displays where shoppers, who aren’t leisurely shopping these days, can grab everything they need in one place. Put sandwich fixings, including sliced meat and condiments, together for grab-and-go convenience.

co-owner Christy McMullen is seeing similar trends with Summerhill’s own baked goods. Whole wheat and sourdough are leading the pack, along with challah. The retailer’s sales of English muffins, baguettes and crumpets have “skyrocketed” during the pandemic. “Customers are looking for denser breads made with high-quality, clean ingredients, plus gluten-free and vegan options.” Bread sales are also being inspired by shoppers looking for comfort foods and nostalgia as they contend with COVID19. Furlani, operated by From the Hearth LLC, is enjoying success with its prepackaged garlic bread, which it says has seen a 13% rise in sales over the last year. “Now that Canadians, especially parents, are preparing multiple meals daily, they seek inspiration from food items that are quick and easy to prepare,” explains Jackie Brenkel, From the Hearth’s director of marketing, North America. While some brands have been hesitant to launch new products, Furlani is charging ahead with new frozen and parbaked products in 2021, including soft dinner rolls (roasted garlic and cranberry honey), hand-tied knots, and biscuits made with butter and aged cheddar. They come in oven-ready bake-able bags and are ready in 10 minutes. We can also expect the gluten-free category to gain more traction in 2021. As McArthur notes, it has a “health halo,” appealing those who are gluten intolerant as well as those who are not. Gluten-free bread consumers “want a quality bread with great taste, with a soft fluffy texture, slices big enough to make perfect

sandwiches with and, more importantly, a bread with strong nutritional benefits, such as higher in fibre and lower in fat,” says Mohamed Safieddine, commercial director Canada, Promise Gluten Free. The company’s gluten-free bestsellers include soft white, multigrain, chia, quinoa and brioche. While some companies are betting on gluten-free varieties, others are focusing on a shift away from chemicals and sugars, according to Dave Read, president of Toronto-based Rudolph’s Bakeries. The brand, established in 1951, experienced a wild ride in the early part of the pandemic. “We had a few weeks of hoarding-­ driven buying , followed by buying patterns so mixed it was difficult to stock shelves properly. By May, things settled with overall sales up by 10%.” By December, with wave two of COVID underway, bread sales again spiked, says Danny Houghton, chief customer officer of B.C.-based Silver Hills Bakery. The difference was that companies knew how to respond this time and what to expect from customers, in terms of what they’re looking to eat. “People are becoming more mindful about what they’re putting in their bodies, wanting to make sure they’re eliminating or making buying choices that are not only helping potential underlying causes, [but also] shoring up their health.” Sprouted grains add increased antioxidant capability, which can help protect against infection, chronic disease and inflammation, explains Houghton. Their popularity can be chalked up to an increased desire for functional foods. With that in mind, four new SKUs of Silver Hills sprouted breads hit the shelves recently: Farmer Fife (made with Canada’s oldest wheat variety), Oat So Lovely, Wheat & Greet with organic wheat berries, and seed-rich Full Seed Ahead. Also new, the company’s Little Northern Bakehouse brand introduced three new SKUs of certified organic, gluten-free, plant-based loaves: Ancient Grain, Oatmeal and Original. And in October 2020 Silver Hills introduced a new brand, Carbonaut, a keto-friendly bread created with an artisanal flair and just two net carbs per slice. It was successful right out of the gate, Houghton says. “Every major retailer we showed it to in Canada said, ‘Yes, we want it. We’re listing it.’” The bottom line? Much like yeast, bread sales—of all types—are on the rise.











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CONNECTION THROUGH CARDS Interest in greeting cards is rising, and as essential businesses, grocery stores are emerging as a prime buying spot  By Carolyn Cooper Prevented from having in-person meetings in 2020, thanks to the pandemic, it seems more consumers reached out to loved ones through paper greeting cards. “It’s one of the few physical ways to be with someone when you cannot be in person with them,” says Nora Weiser, executive director of the U.S.-based Greeting Card Association (GCA). “Right now, we’re lacking so much of that touch in tangible connections, but a card still allows that.” Weiser says the GCA doesn’t have the 2020 sales numbers in yet, but they’re certainly seeing signs of more people sending cards in the past year. According to the GCA’s Facts and Figures, released in December 2020, “there is a material increase in how positively consumers feel about greeting cards, as evidenced by double-digit increases” in their answers to statements like “I wish I gave more cards” and “greeting cards are more meaningful than other forms of communications.” In addition, “65% of consumers agree that receiving cards and letters in the mail is extra special during this time of social distancing.” Dana Scott, vice-president of national account sales for Hallmark Canada, agrees. “Our research found that cards are breaking through and people value them more now than even one year ago,” she says. “The pandemic has emphasized our need to emotionally connect with the people in our lives.” Lockdowns have not only affected how consumers relate to cards, they’ve also changed where they purchase them. Online sales jumped last year, says GCA’s 40  CANADIAN GROCER || February 2021

Weiser, and “there was a shift in people buying many more cards than usual at grocery stores, because they were essential and stayed open.” “Our sales continue to be strong, since many of our retail partners are classified as essential businesses and have remained open during the lockdown,” confirms Rod Sturtridge, president of Carlton Cards. “Grocery stores represent close to 20% of industry dollars and approximately 10% of units [for Carlton cards]. This percentage has increased significantly over the past year as consumers have shopped greeting cards while in grocery [stores] for more essential purchases.” Birthday cards remain the overall top-selling everyday card category, followed by sympathy cards, while leading holidays for card-giving are Christmas, Valentine’s Day and Mother’s Day. The GCA’s Weiser says the care and concern category, which includes get well soon and thinking of you cards, “was selling more this year than ever,” as were cards related to events of 2020. “We actually added a category to our annual competition this year called Trends and Events. So there might be COVID-related cards or there might be political cards that are very linked to events of the year.” Women buy 80% of all cards sold, according to the GCA, and most purchasers are aged 35 to 60. “Millennials are still driving cards,” adds Weiser, pointing to data showing that while boomers buy the most greeting card units, millennials have spent more on cards in the past five years. “They’re particularly fond of the more elaborate and unique, and really appreciate the crafted aspects of cards,” says Weiser, adding some will pay $10 or more for a creative card that replaces a present. In terms of messaging, Weiser says “millennials definitely find it appealing to have an edge to the humour, it’s a little bit irreverent. Of course, the care and concern and condolence-type cards are never going to have too much edge to them. And I think people still turn to greeting cards to say the things that they themselves may not be able to put into words.” Because cards are largely impulse purchases at grocery, card displays should be near the checkout, although Weiser says “some grocers are moving cards to an endcap so there’s more visibility as people pass by.” As well as keeping card aisles tidy and organized, Carlton’s Sturtridge says “strategic placement of outposts in related departments like seasonal or confectionery sections, and close positioning to the cash area, helps increase impulse sales and reminds consumers to add a greeting card to their basket during their shopping journey.” Grocers can also reach out to card companies for help with merchandising. “Buying behaviours have changed due to the need for social distancing, so we are working to make our cards more accessible for people in-store and online,” says Hallmark’s Scott. “You’ll see seasonal card displays up earlier in some of our retail locations and extended promotions to allow people to shop early. In some of our retail locations, you’ll also see displays spread out throughout the store so shoppers will have additional places—beyond the usual greeting card aisle—to shop for cards.”



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Consumers today are increasingly conscious about the authenticity of their food products. Some oil producers may be diluting premium oils with cheaper varieties, or using substandard raw products that result in the oils becoming rancid before their expiry date. Oil producers like cho, which makes Terra Delyssa brand olive oil, use the latest technologies to ensure customers can trace the origin of the products. Using qr codes and blockchain technology, consumers can learn more about the groves where the olives were grown and the mills where they were processed into oil. “The data entered in the blockchain database is not editable,” explains Wajih Rekik, ceo of cho America. “It cannot be lost, changed or tampered with.” 42  CANADIAN GROCER || February 2021

Oils Four things to know

2  THE HISTORY OF OIL Vegetable oils have been used in cooking for thousands of years. Oily plant products were heated by the sun, in a fire or oven until the plants exuded oil that could be collected. Soy oil was produced in China and Japan as early as 2000 BC, while Europeans produced olive oil around 3000 BC. As extraction technology improved, more types of oils became available.



Olive oil may still be a popular choice for cooking, but alternative oils are on the rise. Whole Foods Market named alternative oils as one of its top food trends for 2021. Some popular alternatives at Whole Foods include wal­nut oil, pumpkin seed oil and a soonto-be-launched macadamia oil. “Since the beginning of COVID19, we’ve seen a rise in people cooking at home and being more adventurous in the kitchen,” says Tiffney Stuart, category manager at Whole Foods. “Consumers are recognizing that different alternative oils can bring unique flavours and properties to their meals.” Alternative oils can be used for frying, in dressings or as a finishing oil to add additional flavour to dishes. “Pumpkin seed oil can add a nutty flavour to your favourite dessert recipe, while walnut oil is great for salad dressings or tossed with pasta,” Stuart explains. She has also seen consumer packaged goods incorporate alternative oils in their products. Some examples include salad dressings made with sunflower seed oil and potato chips fried in avocado oil. According to McEwan Fine Foods’ general manager George Bachoumis, millennials are fuelling the demand for alternative oils. While cooking olive oil at a high heat can reduce some of its antioxidants and health benefits, avocado oil has a higher smoke point. “Millennials are more aware of the health benefits compared to an older *according to Nielsen demographic that sticks to traditional ways of cooking,” he explains.

Dollar sales of cooking oils in Canada increased

14.5%* from August 2019 to August 2020

Shelf space can be a challenge for grocers introducing alternative oils. But McEwan Fine Foods’ George Bachoumis says it’s worthwhile to make room for alternative oils. The key to success is ensuring consumers are equipped with what they need to make an informed decision. “Provide information about the health benefits, how to use the oil and what it pairs best with,” says Bachoumis. “Don’t overwhelm

customers. Provide less choice by only carrying the best brands.” To ensure stores are only selling quality oil, CHO’s Wajih Rekik encourages grocers to consider authenticity when selecting which items to sell. “Producers and grocers share the responsibility and duty of transparency to the consumer,” Rekik explains. “Grocers can help by only allowing products they can trace on their shelves.”—Andrea Yu



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Booze-free bevvies

Non-alcoholic beer, wine and spirits are more popular—and better tasting—than ever before  By Jessica Huras

Complex flavours, natural ingredients and small-batch production aren’t buzzwords Canadians have traditionally associated with non-alcoholic beers, wines and spirits—but that’s rapidly changing. Driven by the “sober curious” movement of Canadians who are reducing or eliminating their alcohol consumption, consumer interest in non-alcoholic beverages is growing, and producers are responding to the demand with innovative products designed to be just as enticing as their alcoholic counterparts. According to market research provider Euromonitor International, non- and low-alcoholic beer grossed US$124.5 million in Canada in 2019, and sales were forecast to grow by more than 10% in 2020. Dave DeBlois, category manager soft drinks, juices & drinks, alternative beverages & tobacco at Sobeys, says its stores have seen “strong growth” in both non-alcoholic beer and wine sales year over year. “In the last couple of years, we’ve really seen this category grow and become much more mainstream,” he says. Jo-Ann McArthur, president and chief strategist at Nourish Food Marketing, says younger demographics are spurring the demand for alcohol-free alternatives. “We saw generations like millennials and 44  CANADIAN GROCER || February 2021

gen Z drinking less than their parents,” she says, “partly because they wanted to differentiate themselves, and partly because of the sober curious movement.” Although millennials and generation Z may be the primary force behind the growth of the non-alcoholic beverages market, Steve Zmudczynski, vice-president of on-premise & emerging growth for Molson Coors Beverage Company, notes that non-alcoholic beverages appeal to all health-conscious consumers. “It does skew female,” he says, “but it’s engaging gen Z all the way to baby boomers.” He adds that the “premiumization” of the category in recent years is also sparking the interest of new consumers. Bob Huitema, founder of Toronto’s non-alcoholic Sobrii 0-Gin, agrees premiumization creates a snowball effect that drives further innovation and interest. “As the demand goes up, the quality of products goes up, and then it feeds itself.” Like Zmudczynski, Huitema says health is a common motivator among his customers. With this in mind, many non-alcoholic beverages feature betterfor-you benefits. Sobrii 0-Gin, for example, is made with natural ingredients and has zero calories. Similarly, Calgary’s Partake Brewing offers non-alcoholic beers

with as few as 10 calories per can and features polyphenols that are said to help strengthen the immune system. McArthur notes that the pandemic has caused a dip in the growth of the non-alcoholic beverage category, but she doesn’t expect the impact to be longterm. She points to Google Trends reports that showed 2021 searches for “Dry January”—a popular month-long alcohol-free challenge—were down by more than 50% in Canada compared to the previous year. “But the Atlantic provinces are at the same level as last year,” she says. “The trend is taking a bit of a pause with COVID, but in the Atlantic bubble, where life has been more normal, it hasn’t. I think that tells us that coming out of COVID, the sober trend will continue.” In spite of the pandemic, George Bachoumis, head of retail for Toronto’s McEwan Fine Foods, says its stores have seen about a 10% increase in sales of non-alcoholic beers and wines this year. McEwan displays these non-alcoholic beverages in the same aisle as chips and snacks. Sobeys takes the same approach in some provinces, according to DeBlois. In provinces where Sobeys’ stores are permitted to sell alcoholic beer and wine, however, the non-alcoholic versions are typically displayed near their alcoholic counterparts instead. The latter is a smart approach where possible, according to Molson’s Zmudczynski, who estimates that 75% of customers who buy non-alcoholic beverages also purchase alcoholic ones. Nourish’s McArthur draws a comparison to the flexitarian movement. “It’s not an ‘or’ it’s an ‘and,’” she says. “There was a great study that showed when Beyond Meat was shelved with the meat burgers, sales went up,” she explains. Non-alcoholic beverages are, therefore, best displayed with their alcoholic counterparts to offer customers more choice. Since health-consciousness is key for today’s consumers, McArthur predicts that we’ll start to see more non-alcoholic beverages with added functionality. She points to the Ireland-based Naked Collective’s So.Beer, a non-alcoholic beer set to launch soon in Canada, which is known for its “ImmunoBoost” blend. “It’s going back to the need statement and why people drink,” she says. “Is it to give a boost? Is it to relax? I think adding functional ingredients allows you to address those different need states.”



New on shelf!

Aisles The latest products hitting shelves

1 1  LITTLE NORTHERN BAKEHOUSE Little Northern Bakehouse is adding three certified organic gluten-free breads to its lineup: Organic Ancient Grain, Organic Oatmeal, and Organic Original. The loaves join the Little Northern Bakehouse family of non-GMO, plant-based, nut-free and third-party verified glyphosate-free products that include bagels, sprouted breads, pizza crusts, rolls and buns.


2  NAKED & SAUCY VEGAN OYSTER SAUCE Naked Natural Foods has launched what it’s calling “Canada’s only vegan alternative to the very popular oyster sauce.” Soy-free and gluten-free, Naked & Saucy Vegan Oyster Sauce is sold in 296-mL glass bottles. Although it has 75% less sodium than a typical oyster sauce, according to the Vancouverbased company, it doesn’t compromise on taste thanks to the rich, complex flavour and sweetness of organic coconut aminos. 3  FLOW WATER PEACH + BLUEBERRY Flow Water is adding Peach + Blueberry to its lineup of premium spring water with organic flavours, which already includes Cucumber + Mint, Strawberry + Rose, Blackberry + Hibiscus, Lemon + Ginger, and Watermelon + Lime. The new Flow Water Peach + Blueberry contains no sugar, no juice, no calories, no artificial sweeteners and no GMOs.


4  ENLIGHTENED KETO ICE CREAM Following a successful 2019 launch in the United States, Enlightened keto ice cream is now available at Canadian retailers. Enlightened is sweetened with erythritol, monk fruit and xylitol, which the company says won’t spike blood sugar—a key factor for those following the keto diet. The ice cream is gluten-free, made with zero sugar and is available in six flavours: Coffee Chip, Mint Chocolate, Vanilla Bean, Caramel Fudge, Chocolate, and Glazed Donut. 5  DAYDREAM SPARKLING WATER Daydream is a new sugar-free, caffeine-free sparkling water infused with hemp extracts and adaptogens (non-toxic plants that are believed to help counteract stress). A single can of Daydream water contains only 10 calories and it is available in three flavours: Blackberry Chai, Cucumber Lime and Peach Ginger.  CG


5 February 2021 ||  CANADIAN GROCER 45

Express Lane


Retail strategy and design expert Kevin Kelley talks about the changing grocery store By Shellee Fitzgerald As founding partner and principal at L.A.-based Shook Kelley, Kevin Kelley spends a lot of time studying consumers in food-based environments and uses those insights to help retail clients—the likes of Whole Foods, Harvest Market, and Freson Bros.—develop compelling solutions and spaces. Here, we talk to Kelley about everything from the impact of COVID on the grocery store to what’s next. Here are edited excerpts from the interview.

What impact is the pandemic having on stores and what will be some lasting effects? Prior to COVID, we would’ve said the world was over-sanitized already. We even questioned whether anti-bacterial soap was too much. People would walk in and touch vegetables and pick things up; now it’s obviously completely different. People aren’t touching anything. It’s a fundamental behavioural shift. That lack of tactile-ness has really changed things for us. We see that sticking for a while; however, we know from past epidemics and events that behaviour does change over time, so we don’t see it sticking forever. But we’re looking at surfaces and materials. We’re exploring sensory activation points such as the sense of smell, which is the most powerful sense. So, for the first time in a long time, the smell of Clorox and Lysol and these things are welcome in the store— we’re actually using the smell of cleaner, which is bizarre. We used to do everything we could to disguise it. We’re also looking at uniforms, and how they can suggest cleanliness. We’re learning to make a statement that shows an extra level of service. To shift gears, another big question for us is things like salad bars, wine bars, cafes, olive stations—these 46  CANADIAN GROCER || February 2021

are things we’re studying. It’s not as simple as, “Just get rid of it,” because these are features that really help differentiate a store. We’re starting to look at [attended] salad stations where somebody is there wiping down the counter to [reinforce] cleanliness; people need to see those visual cues, but that does involve a human being and that’s increasing labour. We’re still figuring this out.

What are your grocery retail clients asking for in terms of design? The one thing we’ve heard from the retailers, which surprises us because they’re a pretty conservative bunch, is they’re saying they want flexibility. This tells us they have faith that things are going to go back to normal. They’re having us design stores that have a temporary, short-term phase, but with a longterm vision to bring back a lot of those key aspects/ features that respond to those trends that were already in motion such as more eating on premise, more bars, more social gatherings.

In the future, what will grocery stores look like? We see smaller stores, right off the bat, which means centre store will become much more edited and curated. We see a more restaurant-esque approach, a non-grocery approach. Brands are going to try to not to look like a traditional grocery store. We’ll continue to see urban stores, despite the exodus to the suburbs. Although, we might build urban-looking stores in suburbia. We still see these places as more local and more community [hubs], like in the old days. We actually see that soul coming back into these spaces, and people using the store differently—to have a beer, to engage and to learn about products. We see that coming back. It’s exciting. And we’re doing a lot of experimentation. Could we do stores without aisles? Could we do stores with zones not based on the category of product, but that are consumer-needs based? You think of all the things that go with coffee, or all the things that go with breakfast, or that go with making lunch. It’s a different arrangement. So we’ve been looking at that in a radically different way. I think that’s where the race is going to happen. Grocery’s been resistant to that and this crisis has helped.

What’s the outlook for grocery stores? It’s a really exciting time for grocery stores. Prior to COVID, they had been getting beat on and demoralized. Part of that had to do with the headlines, just over and over [about the death of retail] and “Will there be grocery stores in the future?” Now, they’re having their moment in the sun. Talking with consumers we’re finding they take great comfort in knowing there’s a local grocery store [nearby]. That sentiment, and that spirit, has been really good. Grocers we’re talking to have an innovation mindset now, to go, “OK, what can we do with this once-in-alifetime opportunity?” CG




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